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Full text of "Rapid Population Growth Consequences And Policy Implications"

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per capita, the inevitable consequence when it becomes an inferior commodity revealed as such by the income elasticity of the demand for wheat as food. The one major outlet for wheat that conceivably could be expanded is to use more of it as a feed grain.
Assuredly, wheat is cheap relative to rice in the "international" trade domain, but this fact in itself tells us little. These prices of wheat do not explain the normal consumption of either wheat or rice in low income countries, because so much that is consumed does not enter the international market. Except for Japan, the recent past movements of wheat into the monsoon rice areas have obviously been in response to food emergencies. In mainland China, it was the aftermath of the "big leap forward." In India, it was the bad monsoons and the availability of P. L. 480 wheat. Tiny Hong Kong and several other similar markets are the exceptions.
In closing this interpretation of the wheat-rice economy, the principal implications are as follows:
1.  The supply of these two superior food grains is increasing at a higher rate than that of the demand for them. A declining real price is implied for food grains. The predominant factor shifting the supply is the modernization of wheat and rice production.
2.  Agricultural modernization is no longer confined to the temperate zones, nor is it restricted to mechanization. The thrust of modernization is now strong in south Asia. Crops grown under irrigation are showing large gains from the application of fertilizer which is relatively cheap in the world and from the adoption of fertilizer-responsive food grain varieties which are being improved rapidly.
3.  The real costs of producing food grains are falling. Although particular governments may delay and thwart agricultural modernization by under-pricing farm products and other governments may distort the economic efficiency of agriculture by overpricing farm products, they can only postpone, at a high social cost, an adjustment to efficient food grain prices consistent with agricultural modernization as a strong supply factor.
4.  World food grain prices are not made in Washington, the Argentine, Japan, or New Delhi—nor by the European Common Market. The market forces at work are much stronger than any of these governments. A particular government can seriously impair the world competitive position of its agriculture, as the Argentine has by thwarting its agricultural modernization.
5.  The competition between "cheap" wheat from the high income countries and "dear" rice from the monsoon heartland has been a minor sideshow in the world markets for food grains. However, the modernization of both rice and wheat production within the "rice world" is proceeding impressively today. Although it is not yet certain whether the cost of producing wheat will decline more than that of producing rice, it is more certain that the prices of